Business Law

But she caught the flu and sued for the OHIO. The defendants argued that it was not possible to make an offer to he whole world. The court held that plaintiff was entitled to the OHIO because she had made an acceptance to the defendant’s offer to the whole world by performing all the conditions stated in the advertisement. It is difficult to differentiate between an offer and an invitation to treat. An invitation to treat is an indication that the inviter is willing to enter into negotiations but is not prepared to be bound immediately.

In other words invitation to treat is willingness to negotiate a contract. Newspaper advertisement to the public at large, Product display at self-service shop ND Public Auction are considered as invitation to treat. Newspaper advertisement: In the case of Cello v. Public Service Commission (1964), a post of an Assistant Passport Officer was advertised in a Newspaper. Cello applied for the post and was accepted. The commission dismissed him from the post while he was a probationary officer. Cello claimed that the dismissal was invalid.

The court held that there was a binding contract when the Public Service Commission accepted Cello’s offer of application to fill up the vacancy. Product display at self-service shop: In self-service hops the displayed goods are an invitation for the customers to make an offer. A contract is made when the cashier accepts the payment. In Pharmaceutical Society of Great Britain v. Boots Cash Chemists Ltd (1953), the court held that the display of goods is deemed as only an invitation to treat. An offer is said to be made when a customer puts the item into the basket and the contract is made at the cash counter.

Public Auction: In a public auction, the auctioneer invites the public to make an offer. When those who attend make an offer, it is up to the auctioneer whether to accept it r not. An acceptance is considered made at the fall of the hammer. An auctioneer’s request for bids in Payne v. Cave (1789), was held to be an invitation to treat. The offer was made by the bidder. A notice of an auction is also not an offer but a statement of intention. This was decided in the case of Harris v. Nickering (1873).

It was held that a notice that an auction would be held on a certain date was not an offer which then could be accepted by turning up at the stated date. Section 5(1) and section 6(a) of the Contracts Act 1950 provide that an offer may revoke an offer fore it has been accepted, but the revocation must be communicated to the offered. In the case of Fitch v. Sneaker (1868) the court held that the reward cannot be claimed by the person of he is not aware of the reward for such an act before he did the said act because there is no consensus of mind between the proposes and the promises.

It is stated in the Contracts Act 1950, that the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. By virtue of section 5(1) of the Contracts Act 1950, a proposal may be revoked t any time before the communication of its acceptance is complete as against the proposes, but not afterwards. Hence if a proposes wishes to withdraw his proposal, so before an acceptance is made, his revocation of the proposal is then ineffective. II.

Wrench (1840) that a proposal which is not accepted in absolute will become a counter-offer which will eliminate the original proposal and the promises is not able to reenact it. Be expressed in some usual and reasonable manner: means that if a proposal dictates how an acceptance should be made, the acceptance should be done in that stated manner. Section 4(1) of the Contracts Act 1950 provides that the communication of acceptance is complete when it is communicated to the offer. There are several rules dealing with the communication of acceptance. Firstly the acceptance must be communicated.

Depending on the construction of the contract, the acceptance may not have to come until the notification of the performance of the conditions in the offer as in Caracal’s case, but nonetheless the acceptance must be communicated. Second, an offer can only be accepted by the proposes/offered, that is, the person to whom the offer is made. Third, an offered/proposes is not bound if another person accepts the offer on his behalf without his authorization. Fourth, if the offer specifies a method of acceptance for example post/fax, it must be accepted using a method that is no less effective than the method specified.

Lastly, silence cannot be taken as acceptance. As in Flophouse v. Bindle, the offer cannot write the words, “If I hear no more from you, it means that you have accepted the offer. ” There is a time limit for an acceptance. In Ramset Victoria Hotel Co. V. Interiors (1866), the defendant applied for shares in the plaintiff company on the 8th of June. He did not receive any news till 23rd November. When he was informed of the shares allotted to him, he refused to accept them. The court held that the plaintiff had allowed too long a time to lapse before accepting the defendant’s offer.

The principle of “reasonable time” is also applicable to contracts involving perishable goods. Section 5(2) of Contracts Act 1950 provides that an acceptance may be revoked any time before the communication of acceptance is complete. It is possible for an offer made by the post to be revoked by the offer. However, revocation will be ineffective unless it is enunciated to the offered before the acceptance is posted. Any acceptance of an offer outside the time stipulated in the offer will be ineffective.

If an offer, for example, specifies that acceptance is required within three days, then any attempt at offering an acceptance after five days will be invalid. If no time is prescribed, then the offer may be accepted within a reasonable time. Ill. Section 2(d) of Contracts Act 1950 states, “When, at the desire of the promissory, the promises or any other person has done or obtained from doing, or does or obtains room doing, or promises to do or to obtain from doing, something, such act or abstinence or promise is called a consideration for the promise. As the definition clearly indicates, the consideration is necessary in forming a contract and it can be held that a valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. In Macon Works & Trading Sad. Bad v. Pang Hon. Chin & Nor (1976), the court held that the option to arches a piece of land was not valid due to lack of consideration. There are three types of consideration.

Consideration that is still to be performed is termed executor and the consideration that has already been performed is said to be executed. And the other is past consideration. There are rules pertaining to sufficiency and adequacy of consideration. Sufficiency of consideration means satisfying the legal rules necessary to provide good consideration at law. If the consideration is too vague there will be no contract. In Shields v. Drywall, daughter promised to look after her elderly mother and father for as long as they lives.

In consideration for the daughter’s promise, the father promised to transfer her, his interest in ‘some’ of his property. The court held that this agreement was void because the consideration was not definite and therefore cannot be legally be enforced. Other than that, consideration must be capable of being performed, and it cannot be illegal or unlawful. Every party in a contract must have the capacity under the law of contract, as capacity is a necessary element in forming a valid contract.

Section 10 of the Contracts Act 1950 provides that All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Further in section 1 1 provides explanation on whom are competent to contract. The provision states that every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.

In Malaysia the age of majority is noninsured to be 18 years. This was seen in the case of Tan He Juan v. The Boon Seat (1934). A minor executed a transfer of land. The plaintiff applied for a court order to revoke the said transfer. The court held that a contract made by an infant is not only avoidable but void. Hence the property was restored to the minor. However there are five exceptions to this general rule. A child who has not yet attained the age of majority can enter into a Marriage Contract, Contract of Necessaries, Insurance Contract, Apprenticeship or Contract of Service and Scholarship Agreements.